Saturday, October 23, 2010

Emini Futures Trading / G20 Summit

from the trading desk of CFRN...

Traders sidelined as G20 meets in Seoul Korea!
The inside day we advised you to be on the look out for Friday, came to pass. Traders were apprehensive about the currencies as we approach the G20.  China is a major league player in the mix and we await the outcome of the meeting of the G20 with the Finance Ministers who will maintain dialog to address Global Financial Stability in a marketplace where countries have been debt ridden without immediate resolution. They will focus on Trade Balance as the valuation of the currencies will often dictate the export trade advances or declines. These are sensitive issues as each country must maintain balance to resolve their own economic struggles while trying to maintain good foreign relations.

The US Dollar is under the spotlight in that other countries would like to see a stronger dollar to aid in what they may view as fair trade practices. Our Federal Reserve on the other hand is offering at every juncture more readily available stimulus. Essentially, they may print money to add more stimulus while weakening the US Dollar in the process. Whatever short term benefits are achieved via such short sighted policy, they will be far outweighed by the ultimate price the American taxpayer will be forced to shoulder when the scales are balanced. We find no historical evidence that it is possible for a nation to borrow their way out of debt. If perhaps, we as a nation were still allowed to print our own currency and said currency was actually backed besides something other than a wink and a promise, there could be hope... 

"Fugget about it!" a Soprano would sing.
That hope died in the back of a limo on Friday, November 22, 1963 in Dallas Texas.

The E-Mini S&P500 consolidated most of the day within yesterday’s range.  The last 20 minutes finally gave us a little rally in the session to close toward the highs of the day, but too little, too late for any substantial position trades.  Our CFRN Weekly Trade Zone support of $1165 - $1166 was not reached today.  We held between the CFRN Weekly Trade Zones of $1172 - $1173 and $1182 - $1183 without touching either.   

Next week we may experience much stronger moves and more volatility as the outcome of the G20 is realized.  We look to the US Dollar to keep our CFRN Weekly Trade Zones in check.  Should the meeting stay on course with the current plans without any dynamics, we may look to potential higher trade in the E-Mini S&P 500.  Our CFRN Weekly Trade Zone for support is now $1172 - $1173.  Our CFRN Weekly Trade Zones anticipated for next week may be $1182 - $1183, $1189 - $1190.  Should the meeting somehow pressure the US Dollar to strengthen, we may see our previous support of $1165 - $1166 returning.

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